Get Savvy about PLM

I was reading a book authored by my friend Steve Bell today. In his book

Lean Enterprise Systems

he raised an issue that resonates with me. He cited a study in the International Journal of Logistics from which he concludes “in many organizations 99% of the information processing activity is wasteful…” as a result of the “improper use of IT.” His comments resonated with me due to the fact that PLM systems can be viewed as product information “meta” data vaults or “file” vaults or a combination thereof.

The question of what information belongs where plagues corporations and the enterprise systems that they use. Which system is the master and what system is the master of what data. Some simple rules to live by are related to how the “change” of that information impacts the resulting product. Some examples are:

Changing warehouse and bin locations - does not change the actual product so should not be controlled with PLM workflows

Changing suppliers - “may” change the output product depending upon whether the supplier is a distributor of standard stock items or whether the supplier is actually a contract manufacturer who uses production methods that rely on a “recipe” to produce the output - so the vendor must be qualified and the recipe would need validating.

Changing coatings - qualifies as a form, fit, function change and must be treated as revision controled - yet may be managed at a metadata level not in vaulted files, thus is a change control issue for PLM workflows.

Changing lifecycle status - crosses a boundary zone - defines purchasing decisions, yet some companies will treat this as revision controlled (board changes from prototype revision to production revision. But it changes the design change rules followed by a company.

Changing buyer designations - again this is procurement information that is not to be controlled by the PLM system - yet impacts product change decision processes in terms of when changes occur - who should be reviewing the changes.

So the challenge is to define what data is “owned” by which systems, and what data is “consumed” by which systems. The resulting systems integration requirements can be very significant - and need to be thought out very carefully. And perhaps even ask the question is it integration that is truly needed or is it that the data is needed to be merged for specific repeatable processes - but let each system own its own data and use the right tools to access and view the right data. The tools exist…

Copyright 2007 - LHirr, All rights reserved

One business practice we get asked about frequently by our customers is what to do about part numbering and how PLM systems work with various part numbering schemes.

I won’t hide the fact that I am very biased about part numbering methodology. There are two primary forms of part numbers - “intellegent” and “sequential”.

Intellegent numbers have meaningful significance within the number - and in that they serve as a quick means for visual recognition of part type, product class, supplier, operation process, production phase, or other similar breakdowns. There is often some “sequential” component within the part number. The intellegent part number is a favorite in the small -mid sized businesses that have had to operate predominantly manual engineering practices and have a mid-ranged ERP system that is not particularly restrictive about part numbering. So the part number itself acts as a “database” of the part information. The problem that frequently arises is that a part may change “classification” but not really change form fit or function - such as switching from manufactured to procured so the company faces a process decision - change the part number just to keep the data “correct” or leave the number as is and live with the incorrect meaning behind the number.

Many years ago Hewlett Packard conducted a study on the role of intellegent part numbers in maturing businesses. The conclusion of the study was that as a business matures and grows - the viability of maintaining intellegent part numbers as a business practice became increasingly costly and in the end the companies with sequential numbers were able to more easily adapt and evolve as business entities. Businesses that have grown by merger and acquisition find the intellegent part numbers mire the business down as each entity brings a different “decoder” to the numbering scheme - making things more and more complex.

The benefit PLM brings is that part numbers are a unique identifier - the availabilty and access to all of the classifications that were being manipulated within the part number are actually captured as their own data fields. Changes to those data sets that are not changing form fit or function are not forced to remain faulty nor does a new part number have to be generated. Thus the sequential number is easy to leverage. Most PLM vendors will allow the enablement of using intellegent part numbers (in part because the customers demand it) but they will all acknowledge that intellegent part numbers are not a recommended business practice. In fact to implement automated generation of “intellegent” part number schemes in PLM systems often requires custom rule sets or even custom SDK code to deploy within some PLM systems.

The challenge exists for companies “converting” from intellegent numbering systems to sequential numbering systems. Some companies have hard coded integrations that parse the numbers for other systems - and that means to go to a sequential system some integrations may have to be reworked. But for many companies - it is not a requirement to renumber legacy parts - but rather to pick a time and move sequential from that time forward. For cultural acceptance it is often easiest to mark that “time” as being when the company deploys PLM for the first time - setting a best business practice in place along with the tools rather than forcing the tool to perpetuate a bad practice.

Copyright 2007, LR Hirr, All Rights Reserved

There is a historical tension between a corporations need to innovate and its need to produce. Fostering innovation is not possible within the rigor of production demands and successful production practices are not possible within the highly flexible framework of good innovation. This tension has been studied and analyzed over the years. The conclusions of the studies are that the most highly successful companies in the areas of both innovation and production, are the companies that embrace both sides of the coin - fostering a culture of innovation while observing the required rigor within the production framework.

When this is understood it becomes more clear why PLM and ERP system MUST support different corporate needs:

It is these very differences that show it is a myth to believe that the systems designed to manage your physical inventory with rigor and structure, could be manipulated to become the flexible systems needed to foster innovation. The PLM vendors don’t even pretend to do the business of ERP systems - why is it that ERP systems believe they know how innovation in design should be managed?

Copyright 2007, LR Hirr

One company I spoke with had a problem that was far from unique.  The company had complex machines in factories around the world.  One line of their machines had numerous computer components in it - including an OEMed CPU board (of a specific revision) that was recalled by the manufacturer for safety reasons.  Not surprisingly all systems had to be checked to see if the specific board revision was on the system for replacement.  Because the company had relatively low product volumes it had never considered tracking the system assemblies to the revision level of the components on their machines nor to the serial numbers of the OEM’d parts.  So the only solution was to send field engineers to each machine that had been shipped in a 6 month window (that was as tight as the window could be narrowed to to find the boards).

 So the company stocked the field personnel with replacement boards and sent them around the world to replace the unsafe boards.  Lets look at some of the costs associated with that effort

1) shipping boards to field offices

2) field personnel scheduling with each customer

3) travel and lodging for most customer visits

4) shutting customer production down for “inspection”

5) discovering X% of boards were not affected

6) replacing Y% of boards

7) running short of replacement boards and waiting on shipments

and the list goes on.  Multiply the time, cost, disruption by every machine or customer affected.

Has this ever happened to your company?   Revision tracking of components to serial numbered final assemblies (knowing the AS-BUILT configuration) is a core functionality for many PLM systems.  If you believe that a PLM system  is too costly - consider the above scenario and how much is saved by knowing each exact system affected and being able to work directly with the customers with affected systems and not disrupting the customers that are not affected.

 We all remember the battery recalls on laptops recently - think of what would have happened if the affected lots were not identified.  In a matter of minutes one could check their laptop, do a lookup on the web and know whether thier laptop was affected.

Copyright 2007, LR Hirr, All Rights Reserved